With just over a week on the market, Apple’s newest iPhone iteration – the 4S – has already made its presence felt across the mobile space. Apple reported earlier this week that it sold 4 million devices over the first three days of availability, while AT&T Mobility claimed more than 1 million devices sold and Sprint Nextel boasted about record sales through all of its channels.
The device’s impact was so strong that its lack of availability until the opening days of the fourth fiscal quarter impacted the third quarter results of both AT&T Mobility and Verizon Wireless, which analysts noted saw a lull in postpaid customer additions in September as consumers waited for the new model to launch.
Wells Fargo Securities L.L.C.’s research team completed a post-iPhone 4S sweep of direct and indirect retail channels, noting that most locations are still scrambling to fill orders and sales people have pushed the latest model to the forefront of consumer recommendations.
The firm noted that AT&T Mobility seemed to have an edge in sales, which was attributed to its history with the device as well as greater supply. Sprint Nextel was noted for seeing some traction due to its current unlimited data package, which has caught the eye of some non-Sprint Nextel customers.
Most interesting for the market is the dominance the iPhone 4S has garnered in the recommendations of salespeople, who according to Wells Fargo’s research team are overwhelmingly suggesting consumer purchase the Apple product over competing smartphones. The firm noted that salespeople in all of the stores visited said they would recommend the iPhone over a “4G Android” or BlackBerry device.
“IPhones were pushed as the easiest smartphone on the market,” the Wells Fargo report noted. “While store reps spoke in positive generalities re: the Android devices – not one store associate questioned recommended a [Research In Motion] device for our average user.”
At third-party retailer Best Buy, Wells Fargo’s research team found that two-thirds of sales associates were recommending Sprint Nextel’s iPhone rate plan to customers, compared with 28% recommending Verizon Wireless and 6% recommending AT&T Mobility. However, in terms of actual purchases, the retailer was seeing 50% of customers walking out with an AT&T Mobility iPhone 4S, compared with 39% with a Sprint Nextel device and 11% with a Verizon Wireless iPhone 4S. The report noted the dominance by AT&T Mobility was attributed to a greater number of customers extending an already active contract agreement.
Tearing it apart
In other iPhone 4S news, IHS Inc. conducted a tear down of the latest iPhone device, finding that the components carried a $188 build of material cost for the 16 gigabyte model plus approximately $8 in manufacturing costs for a total price of $196. The BOM for the 32 GB model was pegged at $207, while the 64 GB model was forecast at $245.
Apple is currently selling unlocked 16 GB models for $599, while the 32 GB model is $649. Wireless operators are selling the 16 GB model for $200, the 32 GB model for $300 and the 64 GB model for $400, all with a required two-year contract and data package.
The device’s impact was so strong that its lack of availability until the opening days of the fourth fiscal quarter impacted the third quarter results of both AT&T Mobility and Verizon Wireless, which analysts noted saw a lull in postpaid customer additions in September as consumers waited for the new model to launch.
Wells Fargo Securities L.L.C.’s research team completed a post-iPhone 4S sweep of direct and indirect retail channels, noting that most locations are still scrambling to fill orders and sales people have pushed the latest model to the forefront of consumer recommendations.
The firm noted that AT&T Mobility seemed to have an edge in sales, which was attributed to its history with the device as well as greater supply. Sprint Nextel was noted for seeing some traction due to its current unlimited data package, which has caught the eye of some non-Sprint Nextel customers.
Most interesting for the market is the dominance the iPhone 4S has garnered in the recommendations of salespeople, who according to Wells Fargo’s research team are overwhelmingly suggesting consumer purchase the Apple product over competing smartphones. The firm noted that salespeople in all of the stores visited said they would recommend the iPhone over a “4G Android” or BlackBerry device.
“IPhones were pushed as the easiest smartphone on the market,” the Wells Fargo report noted. “While store reps spoke in positive generalities re: the Android devices – not one store associate questioned recommended a [Research In Motion] device for our average user.”
At third-party retailer Best Buy, Wells Fargo’s research team found that two-thirds of sales associates were recommending Sprint Nextel’s iPhone rate plan to customers, compared with 28% recommending Verizon Wireless and 6% recommending AT&T Mobility. However, in terms of actual purchases, the retailer was seeing 50% of customers walking out with an AT&T Mobility iPhone 4S, compared with 39% with a Sprint Nextel device and 11% with a Verizon Wireless iPhone 4S. The report noted the dominance by AT&T Mobility was attributed to a greater number of customers extending an already active contract agreement.
Tearing it apart
In other iPhone 4S news, IHS Inc. conducted a tear down of the latest iPhone device, finding that the components carried a $188 build of material cost for the 16 gigabyte model plus approximately $8 in manufacturing costs for a total price of $196. The BOM for the 32 GB model was pegged at $207, while the 64 GB model was forecast at $245.
Apple is currently selling unlocked 16 GB models for $599, while the 32 GB model is $649. Wireless operators are selling the 16 GB model for $200, the 32 GB model for $300 and the 64 GB model for $400, all with a required two-year contract and data package.
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